Field
The present subject matter relates to a method and system for communications between establishments to provide for cash dispensing outside of an electronic funds transfer network.
Background
At the present time, the predominant mechanism for a user to obtain cash from the user's account outside of a bank is the automatic teller machine (ATM). Using an ATM to obtain cash presets a number of requirements to both banks and users.
A user must find an ATM location in order to receive cash. ATM networks are often not readily accessible by a user. Many ATMs are located at outdoor, on-street locations. Banks are aware of robbers victimizing users of ATMs. Consequently, banks provide safety instructions for users of ATMs. The user has limited ability to select a place at which to receive cash. ATM card data is subject to theft by use of “skimmers,” which devices are surreptitiously fixed to ATM card readers. Skimmers allow capture of information on a magnetic stripe on an ATM card for use in unauthorized transactions.
In order to be able to dispense cash at more than one bank, a bank must belong to an electronic funds transfer (EFT) network. Electronic banking, also known as electronic funds transfer (EFT), uses computer and electronic technology in place of checks and other paper transactions. EFTs are initiated through devices such as cards or codes that let authorized users access an account. Many financial institutions use ATM or debit cards and Personal Identification Numbers (PINs) for this purpose. Further, a non-user financial institution must belong to an ATM Network that the user's financial institution also belongs to. An ATM Network permits transactions between independent financial institutions. ATM Networks include such groups as NYCE, Pulse, and Cirrus. The Electronic Fund Transfer Act (EFTA), 15 USC 1693 et seq. of 1978 is intended to protect individual consumers engaging in EFTs. EFT services include transfers through automated teller machines, point-of-sale terminals, automated clearinghouse systems, remote banking programs, and bill-payment plans using recurring transfers. The Federal Reserve Board controls EFTA through regulations. The entity that issues the cash must operate in a heavily regulated environment.
Proprietors of retail establishments cannot operate their own EFT systems. Many establishments require payment in cash. In order to provide a customer with cash to spend in the establishment, the establishment must direct a user to an ATM. The proprietor can direct a user to an off-site ATM and hope that the user will be willing to go to the off-site ATM and then return to the establishment. Alternatively, the establishment may provide floor space to an ATM owner. The establishment may receive compensation for use of the space. However, the establishment generally must pay more for leasing the ATM, insurance, and electricity costs. If a skimmer is attached to the ATM, ill will that is generated will be attributed to the establishment and not to the financial institution.
Institutions charge fees for the use of ATMs. Generally, the user's financial institution will charge the lowest fee. Non-user ATMs and financial institutions generally charge significantly higher fees. Additionally, the nonuser financial institution must belong to an EFT network to which the user financial network belongs. Over recent years, fees have been escalating.
Fee-free ATMs are relatively rare. One fee-free ATM network, named SUM, has approximately 5,100 ATMs in the United States. In contrast, according to the National ATM Council, there were approximately 425,000 ATMs in the United States as of 2010. Banks in the SUM Network may still assess charges at non-user ATMs. The SUM ATMs require a user to watch an advertisement in order to be able to conduct a transaction, spoiling the speed and simplicity of a normal ATM transaction.
Essential elements of EFT are PCI compliance and KYC compliance. PCI is the common initialization for the Payment Card Industry (PCI) Data Security Standard. PCI standards are promulgated by the PCI Security Standards Council, LLC of Wakefield, Mass. PCI compliance relates to protection of customers' credit card data and protection from unauthorized use and identity theft. It is highly desirable to have a system in which bank account verification is performed but in which credit card data will never touch servers processing a transaction. KYC compliance relates to knowing the type of business each merchant conducts. One purpose of KYC compliance is to prevent facilitating money laundering or many other illegal activities. EFT systems are generally not designed to inherently facilitate PCI and KYC compliance.
Systems in the prior art for dispensing cash or otherwise remotely providing cash value still retain a number of drawbacks.
U.S. Pat. No. 8,851,366 discloses an online money transfer service operated by a bank or a merchant. A sender enters authentication information and money transfer details into a portal. A recipient's bank may issue credit, a check, or cash. This service is restricted to interbank transfers. It cannot dispense cash from other than a recipient's bank. The service does not dispense cash to a user originating the transaction.
U.S. Pat. No. 8,762,274 discloses a currency dispense and control system for securely dispensing paper currency independent of a standard ATM EFT network. While use of an EFT network may be avoided, ATM hardware or the like is still required. A user does not have the option to select one of a plurality of dispense locations.
U.S. Pat. No. 9,171,303 discloses a cash advance method in which a customer initiates a cash access transaction with a financial card via a cash access system and the customer receives authorization or denial. The customer provides identification and the financial card to a cashier or attendant. The cashier or attendant validates the customer's identity, retrieves the transaction information, and completes the cash advance application. The application prints a non-negotiable instrument. A central server records the transaction and generates an automated clearinghouse (ACH) file and electronically transmits the ACH file to a designated financial institution. Cash requested in the cash access transaction is disbursed to the customer at a cash-dispensing kiosk or the like. Bank participation is required at both ends of the transaction. The merchant cannot control its own hours and amounts it will dispense. The system is primarily intended for disbursing cash at a gaming table.
U.S. Pat. No. 9,010,629 discloses a system in which a card-actuated automated banking machine includes transaction function devices such as a card reader, a printer, a bill dispenser, a display, a check imaging device, and at least one processor. The machine is operative to receive a check and certification data and to dispense cash in exchange for the check. The person presenting the check does not provide user-identifying inputs through input devices of the machine. The system uses a mobile phone to communicate with the banking machine. However, the user is not enabled to select a remote location at which to receive cash. The mobile phone is only used to replace an ATM card in order to initiate a transaction.
U.S. Patent Application Publication No. 20130073365 discloses a system in which a customer uses a wireless device to exchange information comprising codes and identifiers with a merchant's purchase information indicative of goods and prices and the customer's identity. While there is contact via a wireless device, no cash is dispensed. The customer must select a merchant before beginning to use the method.
U.S. Patent Application Publication No. 20120245987 discloses a gift card transaction where a recipient's own account is credited with an amount to be used at a seller. A gift card is not used. The gift card operates via the recipient's own credit/debit card. If a qualifying purchase has been initiated at a merchant location, a processor applies an amount of money associated with the purchase. The requirement of an initial interchange with a bank is removed from the process, i.e., a bank used by a gift card issuer. However, no cash is dispensed.
There is a need for a system in which secure cash dispensing transactions can be initiated outside of an EFT system and a system which provides security, convenience, and flexibility in meeting a user's needs. Additionally, there is a need for merchants to be able to dispense cash securely and with low risk while avoiding the drawbacks of maintaining an on-site ATM.